Abstract

http://ssrn.com/abstract=2005092
 
 

Citations (1)



 


 



Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact


Buket Avci


INSEAD

Karan Girotra


INSEAD - Technology and Operations Management

Serguei Netessine


INSEAD

October 03, 2013

INSEAD Working Paper No. 2013/108/TOM

Abstract:     
The transportation sector’s carbon footprint and dependence on oil are of deep concern to policy makers in many countries. Use of all-electric drive-trains is arguably the most realistic medium-term solution to address these concerns. However, motorist anxiety induced by an electric vehicle’s limited range and high battery cost have constrained consumer adoption. A novel switchingstation- based solution is touted as a promising remedy. Vehicles use standardized batteries that, when depleted, can be switched for fully charged batteries at switching stations and motorists only pay for battery use. We build a model that highlights the key mechanisms driving adoption and use of electric vehicles in this new switching-station-based electric vehicle system and contrast it with conventional electric vehicles. Our model employs results from repairable item inventory theory to capture switching station operation; we embed this model in a behavioral model of motorist use and adoption. Switchingstation systems effectively transfer range risk from motorists to the station operator, who, on account of statistical economies of scale, can better manage it. We find that this transfer of risk can lead to higher electric vehicle adoption than in a conventional system, but it also encourages more driving than a conventional system does. We calibrate our models with motorist behavior data, electric vehicle technology data, operation costs and emissions data to estimate the relative effectiveness of the two systems under the status quo and other plausible future scenarios. We find that the system that is more effective at reducing emissions is often less effective at reducing oil dependence, and the misalignment between the two objectives is most severe when the energy mix is coal heavy and with advanced battery technology. Increases in gasoline prices (by imposition of taxes, for instance) are much more effective in reducing carbon emissions while battery-price reducing policy interventions are more effective for reducing oil dependence. Taken together, our results help a policy maker identify the superior system for achieving the desired objectives. They also highlight that policy makers should not conflate the dual objectives of oil dependence and emissions reductions as the preferred system and the policy interventions that further that system may be different for the two objectives.

Number of Pages in PDF File: 44

working papers series


Download This Paper

Date posted: February 15, 2012 ; Last revised: June 8, 2014

Suggested Citation

Avci, Buket and Girotra, Karan and Netessine, Serguei, Electric Vehicles with a Battery Switching Station: Adoption and Environmental Impact (October 03, 2013). INSEAD Working Paper No. 2013/108/TOM. Available at SSRN: http://ssrn.com/abstract=2005092 or http://dx.doi.org/10.2139/ssrn.2005092

Contact Information

Buket Avci
INSEAD ( email )
Boulevard de Constance
77305 Fontainebleau Cedex
France
Karan Girotra (Contact Author)
INSEAD - Technology and Operations Management ( email )
Boulevard de Constance
77 305 Fontainebleau Cedex
France

INSEAD Logo

Serguei Netessine
INSEAD ( email )
Boulevard de Constance
77305 Fontainebleau Cedex
France
+33 (0)1 60 72 92 25 (Phone)

Feedback to SSRN


Paper statistics
Abstract Views: 2,579
Downloads: 697
Download Rank: 18,989
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.265 seconds